India: BigMint's ferrous scrap index hits 8-month high on improved demand

• Scrap prices increase by INR 2,000-2,200/t w-o-w
  
  
• Finished demand keeps other raw materials supported
  
  

BigMint's domestic end-cutting scrap index in the Mandi Gobindgarh market rose by INR 900/tonne (t) to INR 42,400/t DAP on 6 May, 2024. A substantial improvement has been observed in scrap prices, with a d-o-d surge of INR 800-1,000/t in the region, reaching its highest point in eight months, touching the levels observed on 5 September, 2023. Prices increased by INR 2,000-2,200/t w-o-w in the scrap market.

Raw materials

Sponge iron prices in Mandi rose by INR 700/t to INR 36,000/t. Meanwhile, steel grade pig iron prices in Ludhiana increased by INR 900/t to INR 43,900/t d-o-d.

Semis, finished steel markets

Steel ingot prices in Mandi Gobindgarh rose by INR 800/t to INR 48,200/t during the price reporting and normalisation phase. Meanwhile, prices of semis in other key markets experienced an increase, ranging from INR 700/t to INR 1,050/t. The highest rise was seen in the Raipur steel market, with prices rising by up to INR 1,050/t d-o-d on supportive demand.

In the Mandi region, prices of rebar (Fe500) surged by INR 800/t to INR 52,800/t, reflecting a substantial rise attributed to strong demand. Similarly, the Raigarh rebar market witnessed the highest increase, with prices rising by INR 1,400/t to INR 48,300/t today. Demand kept prices supported across major markets.

Steel prices experienced a substantial improvement, as indicated by market feedback, owing to a range of factors including the positive market sentiment. This stemmed from the escalation in prices of raw materials and the supportive demand for finished steel from buyers.

However, it has been observed by some mills that half of the traders are engaged in restocking activities.

Overview of other markets

The Raipur steel market has sustained positive momentum, extending from raw materials to finished steel, with significant activity observed since Saturday evening. This continuity of operations has played a crucial role in driving the upward trajectory of prices in the finished steel market. Billet prices increased by INR 1,100/t to INR 45,550/t. Rebar prices were up by INR 1,100/t to INR 48,700/t. Meanwhile, in raw material sponge iron (PDRI) prices improved by INR 950/t to INR 30,350/t and steel grade pig iron prices increased by INR 600/t to INR 43,600/t d-o-d.

Price highlights

End-cutting, billets spread: In Mandi, the end-cutting scrap and billets spread was at INR 5,500-5,800/t.

Domestic vs imported scrap market: Imported melting scrap prices at Nhava Sheva Port were at around $401-$407/t, which equates to approximately INR 36,185/t (including freight). Local scrap-HMS (80:20) prices in Mumbai increased by INR 400/t to INR 36,500/t DAP. In India, indicative prices of shredded scrap from Europe stood at $422-$424/t CFR Nhava Sheva.

Raipur sponge iron-billet spread: The current conversion spread (margin) from pellet-based DRI (P-DRI) to steel billets in Raipur stood at INR 15,200/t.

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